Correlation Between Coda Octopus and CTS

Can any of the company-specific risk be diversified away by investing in both Coda Octopus and CTS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Coda Octopus and CTS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coda Octopus Group and CTS Corporation, you can compare the effects of market volatilities on Coda Octopus and CTS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Coda Octopus with a short position of CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coda Octopus and CTS.

Diversification Opportunities for Coda Octopus and CTS

0.76

Correlation Coefficient

Coda Octopus  CTS

Poor diversification

The 3 months correlation between Coda and CTS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Coda Octopus Group and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation and Coda Octopus is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Coda Octopus Group are associated (or correlated) with CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Coda Octopus i.e., Coda Octopus and CTS go up and down completely randomly.

Pair Corralation between Coda Octopus and CTS

Given the investment horizon of 90 days Coda Octopus Group is expected to under-perform the CTS. In addition to that, Coda Octopus is 2.18 times more volatile than CTS Corporation. It trades about -0.07 of its total potential returns per unit of risk. CTS Corporation is currently generating about 0.13 per unit of volatility. If you would invest  5,367  in CTS Corporation on September 19, 2024 and sell it today you would earn a total of  220.00  from holding CTS Corporation or generate 4.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Coda Octopus Group  vs.  CTS Corp.

Coda Octopus Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Coda Octopus may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CTS Corporation

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CTS Corporation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, CTS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Coda Octopus and CTS

The main advantage of trading using opposite Coda Octopus and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coda Octopus position performs unexpectedly, CTS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CTS will offset losses from the drop in CTS's long position.

The idea behind Coda Octopus Group and CTS Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.